BYD posted a net profit of RMB 9.16 billion in the first quarter of 2025, a year-on-year increase of 100.4 percent, marking its fastest profit growth in nearly two years. Revenue climbed 36.35 percent to RMB 170.36 billion, driven by a 59.8 percent rise in NEV sales to just over one million units. The company’s gross margin stood at 20.07 percent, a modest decline from 20.71 percent a year earlier but up significantly from the previous quarter, reflecting disciplined cost management amid rapid expansion. Research-and-development spending rose to RMB 14.22 billion, underscoring BYD’s commitment to innovation in EV technology and fast-charging infrastructure .

How Other EV Companies are Performing

In stark contrast, Tesla reported first-quarter net income of just $409 million—a 70.6 percent drop from the prior year—and revenue of $19.34 billion, down 9.23 percent, as vehicle deliveries slumped to 336,681 units, the lowest since mid-2022. Automotive gross margins fell to 12.5 percent, the weakest level since 2012, pressured by lower average selling prices and elevated tariffs that inflated production costs. Tesla’s EPS declined 40 percent, and analysts have pared back 2025 earnings forecasts amid concerns over brand perception and trade tensions.

NIO remains unprofitable, posting a record fourth-quarter net loss of RMB 7.11 billion, up 32.5 percent year-on-year, on revenue of RMB 19.7 billion, a 15.2 percent increase . Its adjusted non-GAAP loss widened to RMB 6.62 billion, reflecting heavy spending on R&D and marketing amid an intensifying price war in China Looking ahead, NIO forecasts first-quarter 2025 revenue of $1.69 billion to $1.76 billion and vehicle deliveries of 41,000–43,000 units, indicating slower growth relative to peers.

Li Auto reported fourth-quarter net income of RMB 3.53 billion, down 38.6 percent year-on-year, despite a 6.1 percent rise in revenue to RMB 44.27 billion on deliveries of 158,696 vehicles. The automaker’s vehicle profit margin slipped to 19.7 percent from 22.7 percent a year earlier, squeezed by the ongoing battle for market share. For Q1 2025, Li Auto guided revenue of RMB 23.4 billion to RMB 24.7 billion and deliveries of 88,000–93,000 units—a year-on-year decline or flat growth across key metrics, underscoring execution challenges in a fiercely competitive landscape.

XPeng posted a fourth-quarter net loss of RMB 1.33 billion, marginally better than the previous year, on revenue of RMB 16.11 billion—a 23.4 percent increase—driven by 91,507 vehicle deliveries, up 52.1 percent. The company forecasts first-quarter 2025 revenue between RMB 15.0 billion and RMB 15.7 billion and deliveries of 91,000–93,000 vehicles, implying year-on-year growth of over 300 percent but still leaving it in the red as it invests heavily in R&D and international expansion. XPeng expects to reach break-even by late 2025, hinging on global market entries in Europe and competitive pricing of its G6 and G9 SUVs.

Comparative Profitability and Margins

BYD’s 20.07 percent gross margin outstrips Tesla’s 12.5 percent and far surpasses the sub-15 percent margins at Li Auto and XPeng, both of which remain unprofitable at the net level. BYD’s EBITDA margin, estimated above 15 percent for Q1 2025, contrasts with Tesla’s 9 percent and negative margins at NIO and XPeng, highlighting BYD’s superior cost structure and vertical integration—including battery and power electronics production.

With over one million NEV sales in Q1, BYD commands 13.6 percent of China’s EV market—up from 12.1 percent a year earlier—while Tesla’s global deliveries dipped, accounting for roughly 3 percent of total EVs in China. NIO’s deliveries of 72,689 units and Li Auto’s 158,696 represent smaller slices, at approximately 1 percent and 2 percent of the market respectively. XPeng’s Q4 deliveries (91,507 units) account for under 1.5 percent, underscoring BYD’s dominant share.

Geographic and Product Diversification

While BYD derives 90 percent of its sales from China, it aims for 800,000 exports in 2025—outpacing Tesla’s medium-term export goals and dwarfing the limited overseas presence of NIO, Li Auto, and XPeng. BYD’s diversified portfolio—from compact hatchbacks and sedans to hybrids and buses—enables resilience across segments, compared with Tesla’s reliance on Model 3/Y sales and NIO’s niche in premium SUVs.

BYD’s R&D spend of RMB 14.22 billion in Q1, representing 8.3 percent of revenue, underpins its leadership in blade batteries, fast-charging networks, and intelligent cockpit systems. Tesla allocates about 7 percent of revenue to R&D, focusing on AI and vehicle software, while NIO, Li Auto, and XPeng invest 10–12 percent but struggle to convert innovation into profit.

Analysts project BYD’s full-year 2025 net profit to exceed $7 billion, driven by expanded manufacturing capacity in Hungary and Brazil, and growing market penetration in Southeast Asia and Latin America. By contrast, Tesla’s 2025 net profit forecast is set at $4 billion–$5 billion, reflecting slower demand and margin pressure. NIO, Li Auto, and XPeng are collectively forecast to post combined losses of over $2 billion in 2025, absent significant market or product breakthroughs.

Implications for the EV Industry

BYD’s standout performance highlights the competitive advantage of integrated battery manufacturing and diversified product lines, challenging Tesla’s technological leadership narrative. The contrast between BYD’s profitability and the losses at other EV makers underscores the perils of aggressive pricing and overreliance on single markets. As global electrification accelerates, BYD’s model—leveraging scale, vertical integration, and rapid innovation—offers a blueprint for sustainable EV business models amid intensifying competition.

(Adapted from USNews.com)

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